East China styrene main port stocks hit a multi-year low this week, falling sharply to 36,000 tonnes, compared with the previous low of 21,500 tonnes in early June 2018. Why?
As of September 7, the latest total inventory of styrene mainstream tank farm in Jiangsu is 36,000 tons, a big decrease of 25,600 tons from the previous month. Trade spot volume of about 22,000 tons, a decline of 16,000 tons. Inventories hit a new multi-year low, which was last seen at 21,500 tonnes in early June 2018.
East China styrene main port arrivals mainly include several source channels: import cargo, domestic cargo and vehicle pick-up. And the domestic cargo is mainly from Zhejiang, Fujian, Shandong and northeast of several regions. The recent record low of dock inventory in many years is also caused by the superposition of shrinkage from multiple sources. Specifically:
1. Import direction: In 2022, influenced by the dual transformation of domestic and international supply and demand, China’s styrene import decreased significantly. From January to July, China imported 643,500 tons of styrene, down 318,200 tons year-on-year. In September, some styrene imports were repurchased, and the overall arrivals remained low. The typhoon at the beginning of the month led to the closure of shipping in the Yangtze Estuary, which also led to the serious delay of some large import ships.
2. Northeast China: Affected by the reduction of production of some units in the middle and early August, Northeast China is in a continuous shortage of goods, which not only needs the Hebei production area for supplement, but even goes south to Shandong for purchase. After the resumption and restart of Hengli Petrochemical in mid-August, the local cargo shortage situation has been alleviated to a certain extent, but the cargo supply to East China also has a certain degree of shrinkage.
3. Shandong Direction: The PS device with an annual output of 200,000 tons in the downstream of Qingdao Bay officially produced qualified products around August 22, with a recent load of about 50%. The self-consumption of styrene has increased, and the spot mobile capacity of some contract households in East China has decreased. At the same time, another PO/SM large device in Shandong Province was closed for nearly a week due to some reasons in late August. From the end of August to the beginning of September, there was a certain decrease in the replenishment of cargo from Shandong to East China reservoir area.
4. Zhejiang direction: As the largest representative of domestic cargo replenished in East China, Zhejiang Petrochemical Co., LTD., whose 1.2 million tons/year styrene unit has been operating normally recently, and the enterprise inventory has been maintaining the tank bottom level. Last week, the local port closed due to the typhoon, resulting in the delay of loading of some cargo.
5. Fujian direction: A PO/SM enterprise with a local capacity of 450,000 tons/year has been operating at low load since mid-July, and there is a parking maintenance plan in the near future, which greatly reduces the cargo supplement to the main port reservoir area in East China. In addition, due to the shortage of goods, about 10,000 tons of cargo will be transferred from Jiangyin Reservoir area to Fujian in late August and early September.
In conclusion: in the later period, except for the styrene supply from Fujian to East China’s main port, the goods from other directions will pick up to a certain extent. In addition, some domestic devices in East China have negative storage or restart plans, domestic supply is expected to increase by a narrow range, and the bottom of East China’s styrene inventory has emerged. However, combined with the trend of supply and demand in September styrene is still a tight balance structure, East China styrene inventories will maintain a low range shock.
Post time: Sep-09-2022